Oil hits 8-month high
Simmering geopolitical tensions over key crude oil producer Iran and optimism about resolving the Greek debt crisis caused Brent oil prices to reach a nine-month high in February. Brent North Sea crude for April delivery hit $120.70 per barrel, its highest point since June 14 last year.
According to media reports, Commerzbank analyst Carsten Fritsch said although Iran had denied reports of an immediate ban on oil shipments to the EU, it appeared that consumers in Europe were already preparing themselves for just such an eventuality.
He added that industry sources had claimed that leading European oil companies had slashed their March oil imports from Iran by more than 300 000 barrels per day. This action, said Fritsch, was 'prompting additional demand for alternative oil types, thus causing prices to rise.' Commenting on the price hikes in the media, VTB Capital economist Neil MacKinnon said that 'ongoing Iranian tensions and the threat of disruption to oil supplies continue to be the main driver in the oil price.’
Little investment value in listed property
JSE-listed property funds are overpriced at current levels as with prices have grown much faster than earnings in recent years. As a result investors in the sector are taking on significant risk because earnings growth is unlikely to be sustained at previous levels. This warning was sounded by RE: CM
property analyst John Rainier in a February 21 media report. According to Rainier, prices of listed property funds were being driven by a search for yield among investors. “The sector is currently offering a 7.7%
income yield, while cash offers less than 6%.” Rainier said the industry had recently seen the first few earnings reports going backwards.
The robotic parking garage at the VW plant in Wolfsburg, Germany
“After inflation, earnings growth for
the sector is currently negative, compared with the average of over three percentage points since 2004,” he remarked. He explained that like other income bearing investments, the pricing of property was inversely related to moves in interest rates. With cur rent global economic difficulties, additional upside risks were like to continue exerting pressure on all property prices. In his view, the correct time to start investing in listed property would be 'after a few years of disappointing earnings growth, which would effectively change pricing perceptions.'
Beatthemarket.co.za | March 2012
Volkswagen AG anticipates that 2012 will be a challenging year for the company after its sales slid in Europe. Sales in Western Europe outside Germany fell 7.8% and by 1% percent in Germany. Despite an increase in global sales for January, VW's head of marketing Christian Klingler has warned that 'the year ahead will be challenging.' VW's sales for January worldwide increased by 1.3%, with 652,000 vehicles sold during the month, compared to 644,200 in the same month a year earlier. However, VW's decreased sales in Europe have raised concern that the lagging European economy is discouraging consumers and businesses from spending and investing. In the 17 countries that use the euro, economic output
shrank 0.3% in the fourth quarter. Source: SA Press Association (SAPA)
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VW anticipates challenging year ahead as European sales slip
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